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Purdue Economist Testifies In US House Biofuels Panel


Photo: C. Guylas (Flickr)

The expansion of ethanol-based fuels, as mandated by the Renewable Fuel Standard program, has increased the demand for corn.

A Purdue University economist testified Thursday before the House Energy and Power Subcommittee.

Congress is evaluating the EPA’s Renewable Fuel Standard program. The standards outline targets for the quantity and types of biofuels used in America.

During opening remarks of the hearing’s third panel, Chris Hurt described the effects of RFS on agricultural commodities.

“I think it’s a little bit of a mistake to believe that the RFS was the sole factor that caused the amount of changes in prices we’ve had,” Hurt says.

Hurt says ethanol in particular has driven up the price of grains and other farm products, but so has increased soybean demand from China.

The demand also shifts agricultural land away from other crops towards corn and soybeans.

“If we just look at the acreage impacts, 16 million acres of corn driven by RFS and 13 million on soybeans [from additional Chinese demand],” Hurt says.

Members of the National Chicken Council and National Council of Chain Restaurants say they are concerned with rising food and feed costs.

Another panel member was Pam Johnson, president of the National Corn Growers Association. Johnson says only a small portion of total food cost is attributed to raw commodity prices and a stronger link exists between rising oil prices and rising food costs.

Scott Faber, vice president of government affairs for the Environmental Working Group, urged Congress to give priority to second-generation biofuels that use waste or by-products from crops.

The Energy and Commerce Committee will use the panel remarks to inform potential changes to the Renewable Fuel Standard, a mandate of the Clean Air Act expanded by the Energy Independence and Security Act of 2007.

The House committee also developed a series of white papers to assess the RFS program.

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